Government Shutdown Set to Affect Farmers
The Trump administration’s trade war with China has left farmers in a drought in a manner of speaking. After the fall of crop prices, the Trump administration promised a second round of payments in December for the farmers affected by the trade war, but the payments have yet to be made.
The US Department of Agriculture (USDA) has quoted that the aid payments could reach up to $12 billion with soybean farmers taking the bulk of it. However, the aid payments are to be stopped after the first week of the shutdown as a temporary stalemate to the $5 billion sum wanted by President Trump to build his wall.
The proposed stalemate could last much longer and affect thousands of federal workers. With the partial government shutdowns hitting more than a week, it is still unclear whether these payments will ever be given.
On December 21, the USDA issued a statement regarding the payments, which said that the payments will be continuing during the first week of the shutdown but would halt after that for producers who have not certified their productions. These producers have till January 15 to certify their production in order to continue receiving payments
Due to the holidays, the House of Representatives won’t be scheduling any votes up until the new year, which means the shutdowns will extend following the new year celebrations.
Who Is the Trump Administration Paying?
These $12 billion direct payments are designed to facilitate the farmers affected by the retaliatory trade tariffs imposed by China. These payments will help subsidize producers of soybeans, cotton, corn, wheat, dairy, hogs, sorghum and almonds. Soybean farmers will take the majority of the compensations, about $7.2 billion.
Why Are These Payments Necessary?
Since China is the largest importer of soy and USA is the second largest provider to the country, it has been a huge blow to soy farmers in the US as China’s imports for soy from the United States fell to zero.
If the payments are not made to farmers, they might be forced to sell their crops in order to generate cash flow and stay afloat. This could affect the economy in a bad way. 40 million Americans are fed through the Supplemental Nutrition Assistance Program, which means that if subsidies are not provided to the farmers, the food prices would have to be increased and the program will be jeopardized.
The shutdown is also affecting other national programs, although some remain accessible with bare bones staffing levels and some are still up and running with the help of some charitable organizations and state payments. Many, however, have been shut down for now.